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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/25979
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| Title: | Bottom-Up Corporate Governance |
| Authors: | Landier, Augustin
Sraer, David
Thesmar, David |
| Issue Date: | 20-Oct-2005 |
| Series/Report no.: | CLB-06-007 |
| Abstract: | In many instances, “independently-minded” top-ranking
execu-tives can impose strong discipline on their CEO, even though they
are formally under his authority. This paper argues that the use of
such a disciplining mechanism is a key feature of good corporate
gov-ernance. We provide robust empirical evidence consistent with the
fact that firms with high internal governance are more efficiently run.
We em-pirically label as “independent from the CEO” a top
executive who joined the firm before the current CEO was appointed. In a
very robust way, firms with a smaller fraction of independent executives
exhibit (1) a lower level of profitability and (2) lower shareholder
returns after large acquisitions. These results are unaffected when we
control for traditional governance measures such as board independence
or other well-studied shareholder-friendly provisions. |
| URI: | http://hdl.handle.net/2451/25979 |
| Appears in Collections: | NYU Pollack Center for Law & Business Working Papers
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